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Benzene's premium to toluene has hovered around the $100/mt mark for most of October, S&P Global Platts data shows. As a rule of thumb, a spread of $150-$200/mt is needed between the two products for toluene-to-benzene conversion processes such as hydrodealkylation (HDA) to break even.

Most of European HDA capacity is integrated and runs regardless of profitability.

The European spot price of benzene has largely been rangebound around the October contract price of $670/mt for most of the month. On Friday, the spot price was assessed at $661/mt CIF ARA. On Monday morning, a bid-offer range for November loading was heard at $655-$665/mt.

Sentiment in the European benzene market has been bearish since the beginning of last week, as German chemicals producers BASF was forced to shut down its two steam crackers at its Ludwigshafen chemical complex in Germany following a pipeline explosion.

BASF's 550,000 mt/year styrene monomer plant has not produced since last week. The company has not declared a force majeure on styrene monomer production and has said that the styrene facility is on "hot standby."

BASF however declared a force majeure on benzene purchasing on Friday.

Imports from the Middle East have also increased length in the European benzene market, as at least 24,000 mt of Saudi Arabian product was set to discharge in Northwest Europe in the first half of October, Platts has reported.

As a result of the length in the European market, benzene's premium to feedstock naphtha dipped to its lowest level since June 13 this year, or $210.50/mt.

The European toluene market has been oversupplied for most of this year, but contrary to benzene, toluene spot prices have been boosted by a rise in crude oil futures in October.

The toluene spot prices is largely dictated by gasoline blenders' buying interest, and a robust gasoline complex for most of October has supported toluene spot prices in October.

The European spot price of toluene was assessed at $575/mt FOB ARA on Friday. The toluene premium to the November Eurobob gasoline swap was assessed at $81/mt on Friday, up $13/mt on the week.

European traders have also been able to find a home for toluene slugs outside Europe, which has supported NWE toluene prices. This week at least two toluene cargoes are loading in the Antwerp-Rotterdam-Amsterdam area for discharge in India.

The toluene spot price was assessed at a $19/mt premium to the October contract price of $556/mt, or 3.4% higher.